“¢ Persistent USD selling helps offset yesterday’s weaker GDT price index.
“¢ Trade tensions/ECB QE end talks exert additional pressure on the USD.
“¢ Surging US bond yields now seemed to keep a lid on any further up-move.
The NZD/USD pair caught some fresh bids on Wednesday and rose to over one-month highs during the European session.
Despite yesterday’s weaker GDT price index, bears struggled to drag the pair decisively below the key 0.70 psychological mark. Traders even shrugged off positive incoming US economic data, with trade-related developments weighing on the US Dollar and helping the pair to regain positive traction on Wednesday.
Trade tensions escalated further after the US allies retaliated against the Trump administration’s steel and aluminum tariffs. This coupled with the ECB QE end talks boosted the shared currency and exerted some additional downward pressure on the greenback.
Meanwhile, a fresh wave of an upsurge in the US Treasury bond yields, with the benchmark 10-year yield inching back closer to the 3.0% psychologically important level, seems to be the only factor contributing towards keeping a lid on any additional gains for the major.
Today’s second-tier US economic data, showing that the US trade deficit unexpectedly narrowed to $46.2 billion in April, did little to ease the prevailing bearish sentiment surrounding the buck.
Technical levels to watch
A follow-through buying interest has the potential to continue lifting the pair further towards 50-day SMA hurdle near the 0.7090 region en-route the very important 200-day SMA resistance near the 0.7125 area.
On the flip side, weakness back below 0.7025 level might continue to find support near the 0.70 handle, which if broken could accelerate the slide towards 0.6965-60 strong horizontal support.
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